Week 8 Discussion For this discussion, your focus will be to think through what asymmetric information, moral hazard, and adverse selection have to do with hiring a police officer. Instructions….
In retrospect, do you think your choice of alternative was shaped by any of the cognitive biases discussed in chapter 5?
Pick a decision you made recently that has had important consequences for you, Using the material in Chapter 5, analyze how you made the decision and answer the following 6 questions (and sub-questions).
- Identify the criteria you used, either consciously or unconsciously, to guide your decision making.
- List the alternatives you considered.
- Were they all possible alternatives?
- Did you unconsciously (or consciously) ignore some important alternatives
- How much information did you have about each alternative?
- Were you making the decision on the basis of complete or incomplete information?
- Try to remember how you reached the decision.
- In retrospect, do you think your choice of alternative was shaped by any of the cognitive biases discussed in chapter 5?
- Having answered the previous five questions, do you think in retrospect that you made a reasonable decision?
- what if anything, might you do to improve your ability to make good decisions in the future?